Webster Inc.has received a bid for 12,000 units.The costing estimates show that the average cost per unit for this bid will be $600.The company uses cost-based pricing and adds 25% markup to total costs.What total price will Webster ask for the entire order?
A)$9,000,000
B)$7,200,000
C)$1,800,000
D)$2,250,000

Question

Quizplus · Accepted Answer

The total cost for 12,000 units is 12,000 * $600 = $7,200,000. With a 25% markup, the total price is $7,200,000 + (0.25 * $7,200,000) = $9,000,000.